Just about every time you ask a doctor why he or she is looking at a practice purchase versus starting a new practice, you’ll hear “it already has patients” so it feels like a safer bet. While there’s no doubt that having patients is a good thing, we’ve created a really quick way to look at those patients based on other factors to get a better preliminary handle on the viability of the practice. This simple tool is certainly not designed to replace a good professional practice evaluation, but rather to be used as a jumping off point to decide if a practice evaluation is even worth scheduling.
Let’s start by giving the practice 10 points for the fact that it has current patients. Now we subtract 1 point for ever negative factor we see. These negative factors can include the following:
✦ A bad location with lack of visibility, declining neighborhood or no growth
✦ An extremely unattractive building or office space with factors such as a basement location or a musty smell
✦ Old equipment that will need complete replacing
✦ Lack of room for needed technology
✦ Old computer (or no computer) systems that will need complete replacing
✦ A physical chart count that doesn’t even come close to matching computer reports or stated active patient numbers
✦ A doctor who refuses to have the practice professionally evaluated and insists his accountant can give you all the information you need
✦ A doctor who refuses to let you do a physical chart count or bring in an advisor to assist you in your evaluation
✦ For orthodontics – most active patients have already paid in full for their treatment
If, as a perspective buyer subtracts points, we get down to only 5 points left from the original 10, we’d suggest considering very seriously whether to even proceed any further. If we get down to 2 point, we suggest walking very quickly in the opposite direction. Having patients is great, but sometimes the cost is just way too high.
